Sunday, October 21, 2012

Rich Dad, Poor Dad author Robert Kiyosaki, Declares Bankruptcy


Robert Kiyosaki had been known from selling books, Rich Dad, Poor Dad and as a motivational speaker in his seminars. He greatly benefited the Amway pyramid scheme and Oprah Winfrey endorsement and these had altogether helped build his empire. A few years back, he collaborated with American business magnate, Donald Trump and co-wrote a book, Why We Want You to Be Rich: Two Men, One Message

One of Koyosaki’s former companies was sued by Learning Annex. The said company had promoted Kiyosaki’s Rich Dad, Poor Dad and used the company for his several speaking engagements.  Kiyosaki allegedly failed the agreed fee thus his company was ordered to pay $24 million to Learning Annex and its founder chairman, Bill Zanker

Wealth ManagerThe company being sued by Learning Annex is Kiyosaki’s Rich Global LLC. The company had been dormant and does not have the capacity to pay $24 million.

Ed Butowsky, a famed wealth manager and a managing partner of Chapwood Investments sees Kiyosaki’s move a bold and clever. It seems that Kiyosaki did it to safeguard his wealth.

The business magnate is wealthy, other business ventures and personal assets are protected. Since he declared Rich Global LLC, the company being sued as bankrupt, he does not have to pay the $24 million and that makes Learning Annex receive whatever assets left in the bankrupt company. 

Wealth ManagementFilling bankruptcy is always associated with stigma, says Ed Butowsky. And it seems ironic that a man who teaches us to be financial independent ends up in an opposite direction. On the other hand a bankruptcy provides a brand new start for an individual but it comes with a consequence.

A bankruptcy file may remain on your credit history for years and actually impedes to establish wealth in the future.

And there are certain individuals driven by their weak decisions regarding credit and the overwhelming obligation prompt them to declare bankruptcy thinking that it is the best way out of their financial obligation. 

Kiyosaki’s cleverness was prepared him to cover his personal wealth from the judgment by declaring Rich Global LLC as bankrupt. It seems the last resort when one is faced with huge financial responsibility to settle a company more than what his company is worth. What “few million” left with Rich Global LLC is what Learning Annex will get and that “few million” only represents a portion of  Kiyosaki’s vast wealth. 

As what Ed Butowsky has said, Kiyosaki decision to left a few million in the company was a right move because if he left nothing, Learning Annex will do their extent they can muster to get Kiyosaki’s wealth in his other ventures or even his personal wealth.

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